I hate the Lexus lanes — the toll strips more and more states are transforming their under-used carpool lanes into. For a premium price, solo motorists can cruise past congestion on the main highway. I hate them because they’re elitist, antidemocratic and one more sign that admirable causes — such as getting single drivers to consolidate rides and cut pollution — always wind up lining someone’s pockets.
Now the carriers that run online networks are hoping to implement their own Lexus lanes by instituting qualities of service: one for their own content and one for everyone else’s — unless, that is, everyone else would care to pay that premium toll. And if they make it, the Internet may become yet another potential success brought down by greed.
The Baby Bells and cable companies say it isn’t fair that firms like Google, Yahoo!, Amazon and Internet protocol (IP) call service Vonage get to ride for free on the networks they built, making big successes of themselves providing video downloads, music, TV, voice and wireless fidelity (Wi-Fi) connectivity over their infrastructure.
The carriers want to charge Internet companies to deliver those things on their fiber. More importantly, those are exactly the services the carriers want to sell. So they want to dedicate some (perhaps most) of their bandwidth to ensuring their data arrives first.
But the Internet companies say the carriers should be compelled to commit to “network neutrality” — that when it comes to handling data everyone gets the same treatment, no matter where those bits come from. They’ve objected to the carriers’ proposal, saying it will hold them for ransom by slowing their services.
Before coming to Direct I spent five years covering the telecommunications industry’s IP buildouts, and I’ve seen this stance from carriers before. It’s the same argument they made to try to keep independent Internet service providers (ISPs) off their systems. They lost those fights, again and again, and that’s why you can subscribe to EarthLink or AOL over your Verizon phone line.
They were a lot more successful at squelching the rise of competitive phone companies and digital subscriber line (DSL) providers. How many people get their landline phone service from someone other than a Baby Bell? OK, both of you can put your hands down.
Now the same tactics used in those late-’90s regulatory tussles are being trotted out again. There’s Ed Whitacre, chairman of AT&T (née SBC Communications), once again doing his impression of Jeremiah as advance man for the apocalypse, decrying the “free lunch” that content providers are getting on his fiber. There’s Verizon CEO Ivan Seidenberg bemoaning the plight of the carriers who are compelled to let Internet companies “sit on our network and chew up our capacity.” And there’s Walter McCormick, head of the U.S. Telecom Association, urging a Senate subcommittee that government regulation is the Internet’s real enemy and promising that “we will not block, impair or degrade content, applications or services.”
The problem with those vows? They’re nothing new. We heard that the Baby Bells were rolling out high-speed broadband service as fast as possible. But in fact they were dragging their feet, offering slow, high-priced DSL in a shortsighted effort to prop up their bottom lines with per-minute dial-up Internet charges. It was only when cable companies and stand-alone ISPs began providing high-speed Internet to their users that the phone companies got broadband religion and started rolling out true DSL at a reasonable price.
The carriers’ promise that they never will intentionally degrade the quality of outside content only convinces if you don’t believe the argument that their networks already are near capacity. According to press reports, documents filed with the Federal Communications Commission show Verizon may have earmarked as much as 80% of its bandwidth for its own advanced TV and calling services. Everyone who’s not Verizon either pays to get into its Lexus lane or bumps along on that remaining 20% of the digital pavement.
If you were an Internet service like Amazon — or even more importantly, an aspiring Web start-up — would you like your chances riding on a fifth of Verizon’s bandwidth with the carrier’s promise that it will give you its “best effort”? Bet not.
Then there’s the greed-is-good argument: Without financial inducements to expand their broadband networks — namely, the hope that they can reserve it for themselves and their friends — the carriers won’t invest in new fiber. But Vonage CEO Jeffrey Citron pointed out to the same Senate subcommittee that Verizon claimed more in annual depreciation on its assets for the last five years than it’s planning to spend on expanding and upgrading its broadband network in 2006. “They’re actually disinvesting in their wireline networks,” he said.
Basically, the carriers don’t want to be in the network business. Oh, it was all right when they also got to be those networks’ gatekeepers. But when the long-distance phone providers, cable companies and IP voice services began cherry-picking their best customers, phone companies were reduced to providing a low-margin commodity service.
And when the action was in building that network, constructing that core and laying fiber, the carriers were in a pretty good business. Now that the sweet spot has shifted from the network pipes to Web content, the plumbers want to be in that business — provided they can get an edge by recasting the Internet as a private network.
Besides, the carriers already have been paid for delivering these services — by consumers. If Comcast, AT&T and their ilk think subscribers are buying raw access to their broadband pipes, they’re delusional. Those customers are paying not for the Web but for services over the Web: for the video clips, the music downloads, the speedy page loads.
It was a founding principle in the Internet’s early days that the core should remain dumb and all innovation should happen at the edges, where the devices and applications were. That made for a robust network that could adopt innovative ideas quickly. You didn’t have to re-engineer the core, just plug in software where the users sat.
I’m sure the telegraph company wanted to be in the phone business too, and railroads wished they could be airlines. Personally, I’d like to be in a Lexus with a clear stretch of interstate ahead of me. It’s a pity most of us can’t have what we want simply because we want it. It’ll be a pity if the broadband providers can.
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